One of the B.C. Liberal party’s top donors, the New Car Dealers Association, has overseen millions of dollars in B.C. government electric car incentives since 2011.

It’s an unusual arrangement. Normally B.C. government transfers go to health authorities, schools, colleges and non-profit groups that deliver social services, not profit-making enterprises or their associations.

By this spring, $18.7 million will have passed through the new car dealers group for the $5,000-a-car incentives. About $1.42 million of that will have been spent on administration, marketing and training of dealers’ salespeople, according to information provided to Postmedia after a request to the provincial government.

The Liberals recently promised to renew the new car dealers’ arrangement for another three years and put another $27 million into incentives, which will bring the total transferred to the car dealer group to nearly $46 million by 2020.

As the No. 3 top donor to the B.C. Liberals, the car dealers’ association contributed $1.3 million between 2005 and 2016. Individual car dealers have contributed tens of thousands more.

The top 50 donors to B.C. Liberals gave more than $30 million in the past decade, according to an earlier analysis by Postmedia using B.C. Elections data.

Among the top 50 donors, the new car dealers group is the largest beneficiary of transfers from the B.C. government, according to a Postmedia analysis of B.C. Public Accounts data.

In total, $23.6 million was transferred to the top 50 Liberal donors by Victoria, including to several forestry companies, for various purposes.

Critics of donations to political parties have keyed in on the potential influence that contributions provide donors — both to the Liberals and the NDP — with a provincial election only weeks away.

Related

Increasingly, the practice where companies who do business with the government can make political contributions is being outlawed in Canada. That’s because the federal government, as well as Quebec and Manitoba, and most recently Alberta and Ontario, have banned corporate and union donations and set a cap on the amount that can be donated by individuals.

The NDP and the Greens in British Columbia have said they would follow suit, although the NDP continues to raise money under the existing system.

Premier Christy Clark has resisted putting B.C. laws in lockstep with other provinces but, under sustained criticism, she promised recently to set up a panel, whose findings on political financing would be non-binding, after the election. The B.C. Liberals also continue to raise money, about $2 million in 2017, including another $21,350 from the new car dealers group.

British Columbia Premier Christy Clark.DARRYL DYCK /
THE CANADIAN PRESS

Dermod Travis, the executive director of the political watchdog group IntegrityBC, says the transfer agreement with the car dealers group is an “immense” problem, in part because a private enterprise is providing a government incentive program through a third-level of bureaucratic process.

Travis said it couldn’t be that hard for the province’s bureaucrats to directly rebate $5,000 to an electric car purchaser without involving the new car dealers group.

Both Ontario and Quebec use rebate systems. Dealers either reduce the car price and then collect the rebate from the government, or the purchaser applies directly to the province for the rebate. In both cases (up to $14,000 in rebates in Ontario and $8,000 in Quebec), no management fees are provided to dealers and it is the government that provides the rebates, not the car dealers or their associations.

“You end up in a situation where you have a major donor who is effectively getting a major benefit, which almost negates, probably does, the cost of their donations to the party,” said Travis, referring to the transfers to the new car dealers’ group.

One of the benefits of this program is the government is helping private dealers sell electric cars with money for advertising and marketing and sales training, noted Travis.

The province argues the point-of-sale rebate — $5,000 is taken off the price of an electric car at the dealer — helps entice customers to buy electric cars and cuts down on work for the province.

In an interview, B.C. cabinet minister Bill Bennett said he believes the car dealers group can deliver the program cheaper than the province.

Bennett acknowledged that there are some people who believe that corporate donations provide influence, but said what’s important in this case is to ensure the new car dealers’ arrangement has “integrity.”

That is being done through regular reporting to the province and a financial review of the program that will take place in 2017, he said.

“It is probably right that it is not normal to do this with a for-profit organization. … That makes it doubly, triply important for it to pass the smell test,” said Bennett, whose ministry took over responsibility for the incentive program in 2015.

He said new car dealer administration costs have come down – from a high of 14.3 per cent in the early years of the program to less than five per cent now, according to figures provided to Postmedia by the province. From 2011 to 2016, the average administration cost has been 7.6 per cent.

There are no comparable administration-cost figures for the Ontario and Quebec programs.

There was no bidding process for the right to manage the electric car incentive and the deal was given through a direct award to the new car dealers group.

It made sense to do so, argued Bennett.

“On the practical side of it, who else are you going to work with that can provide direct point-of-sale incentives to those who buy a new electric car. Who would be better placed other than the new car dealers?” said Bennett.

The New Car Dealers Association represents 370 car dealers in B.C. There are 541 licensed new car dealers in the province, according to information from the Motor Vehicle Sales Authority of B.C., so not all dealerships belong to the association.

To be part of the point-of-sale program, you have to belong to the association, said provincial officials.

Officials said that, as far as they knew, all dealers interested in selling electric vehicles are members of the association.

In B.C., more than 3,400 electric cars will have been sold under the incentive program by this spring. In Ontario, about 7,500 cars have been sold under its incentive program started in 2010.

The New Car Dealers Association said a question on whether companies that do business with the government should be allowed to make political contributions was better answered by the province.

Blair Qualey, the group’s president, said in an email that the province had asked the group to manage the program to make it easier for consumers to get the incentive.

“We certainly believe that the agreements we have with the province to administer the program achieve this objective and are in the best interest of the consumers as it provides them with a true point-of-sale incentive,” he said.

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